RIO DE JANEIRO (Reuters) - Brazilian oil company HRT Participacoes em Petroleo SA HRTP3.SA will define its plans to sell natural gas from a large, isolated Amazon field by the end of 2012, meeting a promise to investors, the company’s chief executive said Monday.
Rio de Janeiro-based HRT and its partner, Anglo-Russian oil company TNK-BP TNBP.MM, expect to sign a long-term contract with a buyer of the gas by the end of 2013, CEO Melo said.
HRT and TNK-BP said on Wednesday that their latest natural gas discovery in the Solimoes Basin in Brazil’s Amazonas state is likely one of the largest ever found in Brazil. But its location in the middle of a rain forest raises the cost of bringing the natural gas to market and limits the potential customers for its estimated 1.4 trillion cubic feet (40 billion cubic meters) of reserves.
“We are going to keep our promise and have a plan to monetize our gas by the end of this year and a contract to sell it by the end of next year,” Melo said on the sidelines of the Rio Oil & Gas conference.
Possible uses for the gas include condensing it so it can be sold to a metals or mining company such as Norsk Hydro (NHY.OL) and burned to provide the electricity needed to turn bauxite into alumina and alumina into aluminum, he said.
HRT and TNK-BP are also considering plans to sell the gas to a fertilizer or alternative fuels company looking for a secure long-term supply of gas and willing to set up a factory in the Amazon to get it, Melo added.
HRT shares were little changed on Monday, falling 0.22 percent to 4.59 reais in Sao Paulo. Melo made his comments just as the market closed.
Reporting by Jeb Blount; Writing by Reese Ewing and Jeb Blount; Editing by Gary Hill